Our advice is that you shouldn’t post-date cheques because it is likely to be against the terms and conditions of your bank account.
Different banks have different policies, but the majority of banks discourage the practice of post-dating cheques. Many state in their terms and conditions that post-dated cheques should not be written, while some include a note at the front of chequebooks, saying post-dated cheques should not be written.
There are no specific rules on how banks deal with post-dated cheques if they are paid in before the due date. However, it’s likely that if your bank spots a post-dated cheque that you have written, it will return it with the reason given as “post-dated cheque”. This is likely to be inconvenient to both you and the person or business you have given the cheque to.
If the bank does not spot that the cheque has been post-dated, the cheque would then probably be paid before you intended or returned unpaid if you have insufficient funds in your account. This could potentially incur you charges and cause inconvenience to the recipient.
If you want to make a person-to-person payment on a particular future date it may be preferable to set up a standing order or one-off automated payment using online, mobile or phone banking services. To do this you will need the recipient’s account name and number, and sort code.
Consumers and businesses are advised not to accept post-dated cheques because of the problems they create if they are paid into their bank accounts before the due date. There are no specific rules on how banks deal with these post-dated cheques if they are paid in before the due date. However, it’s likely that if the paying bank spots a post-dated cheque, it will return it with the reason given as “post-dated cheque”. This is inconvenient to both you and the person or business you’ve given the cheque to.
If the bank does not spot that the cheque has been post-dated the cheque would be paid before you intended it to or even returned unpaid if you have insufficient funds in your account – potentially incurring charges for you.
No, the law has not changed – it is the way we pay that has changed.
The habit of post-dating cheques goes back to when the only means of payment was by cheque or cash; i.e. before the advent of automated payments such as Direct Debits and standing orders. Historically, if someone wanted to phase their payments, such as for paying into an insurance policy, they issued a series of post-dated cheques to the recipient. Because this was an accepted payment method, the receiver of the cheque had a system in place for making sure that the cheques were not paid in before the intended date.
However, very few people have these post-dating systems in place now as there has been a move to automation, so any post-dated cheques they receive tend to all be paid in at the same time, running the risk of being returned unpaid.
Many banks state in their terms and conditions that post-dated cheques should not be written while some include a note at the front of chequebooks, advising that post-dated cheques should not be written. So the safest practice is not to write post-dated cheques at all and set up a series of standing order payments, (provided the recipient is set up to accept automated payments to their account). Or you can future date a series of online or mobile banking payments.
You will need to speak to your bank. In general, banks do not charge cheque writers for returning a cheque unpaid because it is post-dated. If your bank paid the cheque and increased your overdraft, you should speak to your bank about this, though you might find it was outside the terms and conditions of your account.
If the payer’s account is closed, the paying bank would not be obliged to honour the cheque and you would need to ask for payment by another means. However the cheque would be evidence of the debt in the event of a dispute.
It is the same advice for businesses – you should not post-date your cheques. In the past, before Direct Credits and online banking became available, if a business wanted to phase their payments the accepted way of doing this was to issue the person you wanted to pay with a series of post-dated cheques. However these days businesses can set up a series of automated payments through their bank branch or through their phone or online banking service, specifying the dates when they want specific payments to be made, thus retaining control of their cash-flow.
Businesses should speak to their bank for more information.
Some banks advise customers at the front of their chequebooks not to write post-dated cheques while many state in bank account terms and conditions that post-dated cheques should not be written However, as this is a competitive matter the banks themselves decide how best to communicate with their customers.